K-Electric Trains to Run in Cairo, Egypt... Hyundai Rotem Wins 755.7 Billion KRW Order

The image of the Cairo Metro Line 2 train manufactured by Hyundai Rotem. [Photo by Hyundai Rotem]

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[Asia Economy Reporter Han Ye-ju] Hyundai Rotem has succeeded in winning the Egyptian electric train project, beating Chinese and Spanish companies.

On the 25th, Hyundai Rotem announced that it had won the contract for the supply and localization project of electric trains for Cairo Metro Lines 2 and 3, worth 755.7 billion KRW (563.2 million USD), ordered by the National Authority for Tunnels (NAT) under the Egyptian Ministry of Transportation.

This contract was secured through a strategic partnership with Egypt's new public-private railway vehicle manufacturer 'NERIC,' with the total project scale amounting to 880.2 billion KRW (656 million USD). Of this, Hyundai Rotem holds an 86% stake in the total project, while NERIC holds the remaining 14%, equivalent to 124.5 billion KRW (92.8 million USD). Hyundai Rotem also plans to promote the transfer of local railway vehicle manufacturing technology.

Hyundai Rotem is scheduled to deliver electric trains for Cairo’s key railway lines: Line 2 (Shubra Station to El Monib Station, 21.6 km) and Line 3 (Adly Mansour Station to Cairo University Station, 41.3 km) by 2028. After delivery and the warranty period, the company will also be responsible for vehicle maintenance for eight years.

The Egyptian government, focusing its capabilities on developing the Suez Canal Industrial Zone, will be able to simultaneously establish a railway vehicle production plant within the industrial zone and expand the localization of railway vehicles, which is its top priority, through this cooperation.

This Line 2 and 3 project was won after competing against Spain’s CAF (Construcciones y Auxilios de Ferrocarriles) and China’s CRRC (China Railway Rolling Stock Corporation).

The company cited the active export diplomacy of the Korean government as the background for its success. To support Hyundai Rotem’s contract, then Minister of Land, Infrastructure and Transport, Noh Hyung-wook, was dispatched to Egypt in February this year. Last month, the Ministry of Economy and Finance and the Export-Import Bank of Korea decided on financial support totaling 730 billion KRW (660 million USD), including a 460 million USD loan from the Economic Development Cooperation Fund (EDCF) and 100 million USD in export financing.

Hyundai Rotem’s local business performance also contributed to winning the contract. The company had previously supplied 484 electric trains for Cairo Metro Lines 1 to 3. It is also in charge of the 215 billion KRW (110 million USD) Nag Hammadi to Luxor railway signal modernization project.

Due to this support, about 100 domestic small and medium-sized railway-related companies are expected to have opportunities to enter overseas markets, and the export ripple effect is projected to reach approximately 300 billion KRW. The employment inducement effect is also estimated at about 5,000 jobs.

A Hyundai Rotem official said, "Thanks to continuously promoting the excellent quality of our railway vehicles, we have been able to expand our presence in the local market. Since our active localization efforts and experience are recognized in neighboring foreign countries, we will do our best to use this project as a stepping stone to further increase our market share in the overseas railway market."

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